In this digital world, organisations are facing global competition as well as manpower pressures leading towards knowledge economy, which heavily impacts on their local and international businesses. The trend is to foster collaboration and knowledge sharing to cope with these problems. With the advancement of technologies and social engineering that can connect people in virtual world across time and distance, several organisations are embarking on knowledge management (KM) systems, implementing community of practice (CoP) approach. However, virtual communities are relatively new paradigms, and there are several challenges to their successful implementation from an organisation’s point of interest. There is lack of CoP implementation framework that can cater to today’s dynamic business and sustainability requirements. To fill the gap in literature, this paper develops a practical framework for a CoP implementation with a view to align KM strategy with business strategy of an organization. It explores the different steps of building, sharing and using tacit and explicit knowledge in CoPs by applying Wiig KM cycle. It proposes a practical CoP implementation framework that adopts the Benefits-Tools-Organisation-People-Process (BTOPP) model in addressing the key questions surrounding each of the BTOPP elements with a structured approach. Finally, it identifies key challenges such as organizational culture and performance measurements, and provides practical recommendations to overcome them for a successful CoP implementation.